Yen went on a free fall to a 24 year low yesterday. It is the third largest fiat currency in the world. Japan is also the largest holder of US treasuries.

      • silent_water [she/her]
        ·
        2 years ago

        I don't understand step 2 of this plan. they prop up prices on artificially low yielding bonds, but what does this accomplish beyond inflating the value of the currency away? how will they stave off riots when food, rent, and gas prices spiral out of control?

        • zifnab25 [he/him, any]
          ·
          2 years ago

          they prop up prices on artificially low yielding bonds, but what does this accomplish beyond inflating the value of the currency away?

          The cheap lending keeps businesses from going into recession mode and firing a bunch of people. If money is cheap, labor is also cheap and the incentive is to maintain/grow staff.

          how will they stave off riots when food, rent, and gas prices spiral out of control?

          I mean, Japan is about even on Imports/Exports, so as long as the rest of the world keeps buying their manufactured products, they'll have equivalent cash-on-hand to import food and energy. As to rents, the Japanese population is contracting rather than expanding. So real demand for housing is falling while real demand for labor is rising. The real challenge Japan faces is a foreign investment in housing that drives unit prices up well above what lay residents can afford.

          The consequence of this sky-high real estate cost has been... a collapse in new families and new children, resulting in a tightening labor market and soft floor on housing demand. I would worry less about rioters than squatters in this situation.

        • CoolerOpposide [none/use name]
          ·
          2 years ago

          They don’t. They’ve just kept kicking the can down the road ever since their first bout of stagflation with increasing severity each time

    • mr_world [they/them]
      ·
      2 years ago

      They're trying to change how money moves by buying/selling corporate bonds. The same shit the US government does. The US bond market has been fucked for a few days too. Everyone is trying to take plays from the good liberal economics playbook. We'll see how it turns out.